Under the old regime, slabs are: up to Rs 2.5 lakh (nil), Rs 2.5-5 lakh (5%), Rs 5-10 lakh (20%), above Rs 10 lakh (30%). Under the new regime (FY 2024-25): up to Rs 3 lakh (nil), Rs 3-7 lakh (5%), Rs 7-10 lakh (10%), Rs 10-12 lakh (15%), Rs 12-15 lakh (20%), above Rs 15 lakh (30%). Section 87A rebate makes income up to Rs 7 lakh tax-free under the new regime.
Employees declare their preferred regime at the start of the financial year through the Zoho Payroll ESS portal. Salaried employees can switch regimes once per year at the time of filing their ITR. For TDS purposes, the regime declared in Zoho Payroll is used throughout the year. If an employee wants to change mid-year, they must update their declaration and Zoho Payroll will recompute TDS accordingly.
From FY 2023-24, the new tax regime is the default for salaried employees. If no declaration is received, Zoho Payroll computes TDS under the new regime. Employees who benefit more from the old regime (due to large HRA, home loan interest, or 80C investments) should actively declare old regime early in the year to avoid higher TDS.
The income tax regime in Zoho Payroll is the employee’s choice between the old regime (with exemptions and deductions) and the new regime (lower slab rates, minimal deductions). The selected regime determines how monthly TDS is computed. Employees declare their choice through the Zoho Payroll self-service portal.
From FY 2023-24, the new tax regime is the default in Zoho Payroll. If an employee does not declare a regime, Zoho Payroll computes TDS under the new regime. Employees who prefer the old regime must actively submit their declaration through the portal early in the financial year.
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